Rapid advances in data-driven technology and a precipitous rise in catastrophic flood events in the US presented an opportunity for this InsureTech startup
There are 62 Million homes at moderate or extreme risk of flooding in the US, according to insurance risk assessment firm Verisk.
Homeowners insurance does not typically cover flood damage and up to 50% of homes in high-risk areas have no flood insurance at all. This amounts to a serious problem, argues the founder of InsureTech startup Neptune Flood Insurance Jim Albert in this week’s episode of the Business of Data Podcast.
In the past, most flood insurance in the US was provided by the National Flood Insurance Program (NFIP). Now, powered by innovative technologies, nimble insurgent companies are shaking up the status quo.
“The NFIP has done an exceptional job over the years, but as with most government programs, technology has started to outstrip what has happened within the flood space,” says Albert. “And so, what I tried to create with Neptune when I founded it in 2016 was an ‘Amazon-like’ buying experience in flood insurance.”
“You can get one-click buying for virtually everything else you do in life,” he continues. “So, we tried to make it easy to buy flood insurance in the US through the use of data analytics and a really simple online quoting platform.”
The game-changing, automated approach championed by Neptune Flood Insurance was not without its skeptics. In 2016 when the company was founded, the idea of digital insurance was even more revolutionary than it is today.
“There was a lot of skepticism about digital insurance [back then]. Could a digital model actually replace the traditional back room full of underwriters?” Albert recalls. “[Especially] when I explained that we don’t have any underwriters. In fact, the underwriter is the computer.”
What sets Neptune Flood Insurance apart from its competition is the speed that customers can get a quote and buy their flood insurance online.
We’ve proved in the model at this point,” Albert says. “We pull in about a hundred different data elements in one second when you enter the address, and we do the full evaluation right then and there.
The application of this technology could not be timelier. Not only are flood events likely to occur more often in the US, but due to the pandemic no-one wants to have an inspector in their home, nor to wait weeks for an estimate.
Do [customers] want to sign on to a days or weeks-long slog to finally get the information that they need?” Albert concludes. “Or [do they] want to go to one site that has seemingly all the information with a really good price and great coverage options? That’s what we see happening.”
Key Takeaways

Many homes at high risk of flooding in the US are uninsured. A lack of awareness of the risks is one cause, but catastrophic damage can take years to recover from
Data has paved the way for a better solution.  By pulling together data from a multitude of sources, Neptune Flood Insurance can provide a policy in seconds
Hyper-personalization is on the way. Other types of insurance companies will soon take advantage of advanced, data-driven technology to provide highly personalized policies to their customers